By Paul Johnson
Pannone Corporate senior partner Paul Jonson describes the firm’s journey out of a regional powerhouse and into an ambitious, entrepreneurial start-up
As a spin-off from one of the northwest’s biggest legal brands, Pannone Corporate started life with some serious momentum behind it on 14 February 2014. While most of legacy Pannone was snapped up in a highly publicised acquisition by Australian-listed Slater & Gordon, the firm’s head of dispute resolution Paul Jonson and senior partner Steven Grant carried out a management buy-out of the firm’s commercial practice groups. “Pannone had a very good name in the northwest, with established clients, but at the same time it also gave us some of the advantages of being a start-up. We could pick the teams and refresh the client service offerings”, Jonson recalls, now as the firm’s senior partner. He says the leadership team at Pannone Corporate knew straight away that the firm had to be more agile, modern and culturally enlightened than its larger, more traditional legacy firm had been, so one of the first things to go was lawyers’ billing targets. “We felt that was corrosive to trying to develop long-term relationships with clients. Other firms have done it since then, so perhaps it’s not as rare now as it was in 2014 but it seemed quite a bold move at the time”, Jonson explains. The firm does set team targets and monitors and manages performance, but individual billing targets have been scrapped. With a little help from a team at PwC in the early days, the firm introduced a recruitment and human resources system that was fit for the new, more entrepreneurial firm. It includes a clear career progression framework so that everyone at the firm can see what is expected of them at every stage in their career.
“It’s very specific, so people can actually see what it is that they need to do to get to the next stage. A lot of firms put a lot of emphasis on lawyers being “time served”. But we think that if you’re doing it – you’re exhibiting those behaviours and hitting those targets – and there’s clear evidence of that, that’s all you need. It’s not really about being in a particular position for a set number of years”. It’s a structure, and cultural attitude, that Jonson believes probably appeals more to the millennial generation than it did to aspiring lawyers when he was working his way up the career ladder in the late 1990s. He remembers his own hunger to compete as a young lawyer but has also seen the toxic cultures it can create. Big competitive egos can become valuable rainmakers in a large firm but in a smaller firm, co-operation is the firm’s clear preferred approach. “We’re not interested in big egos, we’re interested in committed, talented people that take responsibility and can help us drive the business forward”, he says. “Because in our experience, those big egos carry with them unhelpful behaviours.
And it’s just not conducive when you’ve got a smaller team of people”. He has no problem admitting a different approach can work in other firms: “In a firm like Pannone where you had 725 people at its maximum, you can accommodate some big egos because you’ve got a lot of insulation around them. But where you’ve got 80 or so people, a couple of those kind of individuals is just not good for the culture.” The leadership team; Jonson, chairman Steven Grant and managing partner Nicola Marchant take a lead on recruitment, assessing candidates as much for their cultural fit as for their legal prowess. “We’ve passed up many otherwise talented individuals because we just didn’t think we were the right firm for them”, he says. “It’s not to say that we want everyone to look and feel the same. That isn’t the case at all, there’s a healthy blend of people, but it’s about having some common core values”. Those values include putting colleagues and clients before oneself and taking responsibility to get a job done, Jonson explains. “For us it is about the collective.” Developing the firm with such a clear sense of identity has also helped to differentiate it from its predecessor.
While Pannone was a well-recognised and respected brand, it was also multi-disciplinary and well known for areas of work that now have nothing to do with Pannone Corporate’s commercial focus. “It was quite hard to get in front of a new client when you’re well known for so many things; like child abuse inquiries, divorce and personal injury. Pannone was great at those things and those people need representation at the highest level but it’s not what we do. “When you tried to talk to the managing director of a £100m business about why he should use you, the fact that those areas come up when the potential client Googled the firm’s name wasn’t helpful”, Jonson explains, recalling life within the legacy firm’s disputes team. Adding the ‘Corporate’ moniker and designing a culture that appeals to its target large SME client base has helped the firm to establish itself among a range of big brands and expand its remit with those it brought over in 2014. The firm has acted for Manchester-based online clothing retailer Boohoo, for example, since it launched in 2006. As the business has grown it has established a panel but Pannone Corporate remains one of the four firms acting for the business, which is now worth more than M&S.
The firm also works for Chevron, Brother, Mitie, Iceland Frozen Foods and Manchester City Council to name a few clients. Jonson says he has noticed a maturity in clients’ attitudes to appointing firms over the last decade. It’s no longer the case, he explains, that major companies will blindly stick with magic circle, silver circle and regional law firms, they have become more sophisticated in their approach to buying legal services and will seek out smaller or boutique firms that have the right offering. “We’ve got some talented people, we’ve got realistic pricing structures and I think the larger clients are more open to a discussion than perhaps they were before the credit crunch 10 or so years ago”, he says. “They’re more open to a discussion because there is a place in that kind of businesses’ requirements for a focused commercial firm like us.” The rise of in-house lawyers across all types of business has supported this sophistication. As Jonson puts it, “they have been in private practice, they know when they need an Addleshaws, for example, or a firm like us to do a particular piece of work”. Pannone Corporate has ridden the wave of that sophistication, gaining work from major corporates. Jonson says around 40 per cent of the transactions the corporate team deal with have at least one overseas party. And it has well established international connections via longstanding networks. It’s a virtuous circle in terms of financial performance and recruitment – the client base is good, and so good people are attracted to the firm, and good people keep clients happy, bringing in more good work.
Jonson says the firm was realistic about ambitions for Pannone Corporate, although he says the firm has exceeded expectations since 2014. Reflecting on that early period he points out that Manchester had seen some big firms hit the buffers and as a result he and the rest of his leadership team “were just very careful not to try to reach for the stars”. When the team moved into its own premises in a cool converted grade 2 listed chapel at the Castlefield end of Deansgate, is was around 63 people. Today there are 81 in total. “We’ve grown steadily, but we’ve been quite careful with our growth, I suppose having seen what happened to firms like Cobbetts and Halliwells – they were a couple of years before the Pannone split but it was still in people’s memory.”
Since then, of course, Manchester has seen an influx of major players take up residence in the city, notably Freshfields moved in in 2015. This has had a two-fold impact on firms like Pannone Corporate. On the one hand, being based in Manchester is not seen as so debilitating in terms of securing big ticket work and on the other, while there’s more talent in the region, there’s also more competition for it. “Recruiters will certainly tell you there’s a war on talent in Manchester, but I’m sure that applies to all the big legal centres”, Jonson says. “It’s been interesting because having firms like Freshfields open in the last five years has been great, it’s a really healthy thing for Manchester’s legal sector, but what it has done is create a bit of competition around paralegals and a little bit of wage inflation”.
The areas most in demand, he explains, are data, corporate, real estate and employment. The latter has suffered from a talent gap since the government’s introduction of tribunal fees in 2013, and while the reversal of that policy in 2017 has seen the contentious work start to increase, there are fewer junior people to do it. For Pannone Corporate that just means doing more of what they do best and Jonson’s ambition for the firm going forward is to make it the leading SME corporate firm in the northwest. The firm won the medium sized firm of the year at the Manchester Legal Awards last year. He says the firm is looking for new people more often than not, though these tend to be at associate to director level rather than lateral hires of partners. Pannone Corporate has also taken on two trainees per year, all of which have stayed on with the firm since qualifying. A lot of water has passed under the bridge since 2014. Pannone Corporate took a less radical route out of the legacy firm than the other practice areas and a patient and focused approach has been paying off.
ROUTE TO THE TOP J
onson’s early career saw him move to the southwest after qualifying in Manchester in 1994. After a short stint in a Gloucesterbased firm, he joined Osborne Clarke (OC) in Bristol – a firm that has long been renowned for its individual flair and entrepreneurial culture. Jonson credits OC with teaching him a lot about client care and breaking the mould a little when creating an identity for a business. It also gave him experience on high-profile work. He particularly recalls a string of litigation brought by banks and building societies in the region, which ended up in precedent setting cases at the Court of Appeal.
It was a good few years and jobs at Pinsent Curtis and Muckle LLP before he joined the dispute team at then Pannone Partners in 2004, but the firm clearly fitted and 16 years later he is proudly helping to lead its successor. It’s a long way from his early ambition of becoming a vet. “I did some work experience and quickly learnt I was too squeamish for that”, he confides. He’s not sure exactly how his teenage mind travelled from the sciences to law, but he suspects long hours in front of LA Law or a similar 80s classic prompted a desire to pursue his eventual career. “I’d always been fascinated by the concept that, you know, you can win a case by finding a particular document, finding that needle in a haystack”, he recalls. “At the time, sitting around working on a complicated real estate transaction wasn’t really for me. But the cut and thrust of litigation, I suppose that adversarial nature really appealed to me”.
If he’d known that legal practice would actually involve pouring over contracts and commercial agreements all day long, he jokes: “I would have had to get over my squeamishness”.